Enron’s Function
The crooked E depicts the historical operations of Enron Company, which was declared bankrupt in December 2001. The company was the Fortune 500’s 7th largest company functioning as business insurance against bankruptcy of suppliers, customers, or debtors and offered contingency plans through virtual assets. It was also a top stock market exchange player in the wall street journal (Mercado, 2011). However, the movie exposes the company’s mismanagement and unethical events that led to its bankruptcy in 2001.
Movie Summary
The story presents a breakdown of the Enron scandal through Brian Cruver, an employee in the bankruptcy division. His role was convincing people to insure with Enron, whose dealings were inflated by the executives. The inflated reports were used to gain profits through bonuses on these deals based on future estimates while the company incurred debt. Moreover, the debts were misreported to portray the company’s success and increase stock sales. However, the hidden debts were discovered, and the company faced bankruptcy. Brian’s role was an indirect implication in the scandal for not reporting the misreporting of the project dealings.
The Main Players
Enron’s scandal was perpetuated by the three main players facilitating the unethical practices, management, auditors, and investors. Management misreported financial statements and revenue estimates for profit through bonuses, whereas the auditors were paid off to validate the false in the audit reports. Other players were investors, such as Mr. Bloom, in part benefiting from the manipulated stock market prices, buying and selling for profit convenience at the expense of clients and other stakeholders (Mercado, 2011). The three groups coerced company systems to perpetuate false performance for financial gains.
The Whistle Blower
Whistleblowing is a significant element when assessing ethical business conditions. The whistleblower is considered an individual that divulges fraud or unethical activities to authorities (Saputra et al., 2020). Thus, the investor whistleblows when demanding a balance sheet to substantiate the earnings reports, revealing a lack of transparency. Sharon Watkins was a whistleblower reporting unethical conduct in the financial records and reporting to the chairman (Mercado, 2011). Despite the lack of action, there was an attempt to whistleblow unethical misreporting.
The Effects and Outcome of the Scandal
The scandal revealed significant unethical conduct in business environments leading to Enron’s bankruptcy. The clients that had signed contracts with the company lost all the money they invested in the insurance plan. The accruing money lost among clients was estimated to be over 25 billion dollars (Mercado, 2011). On the other hand, the employees were most affected as the scandal is detailed to have influenced the loss of over 10,000 jobs. Stakeholders also lost money they invested in the company, while Mr. Bloom confessed to Brian about the guilt that he struggled with. Nonetheless, the company’s influence on the energy inflation costs resulted in a further loss as schools were shut down and crippled the provision of services in hospitals.
Ethics and Ethical Dilemma
Ethical dilemmas exist in executives’ actions that inflated profit estimates and revenue projections for gains through bonuses on deals, presenting unethical leadership. The employment channels facilitated unethical conduct as jobs were secured through sexual interactions or relationships, presenting toxic workplace ethics (Mercado, 2011). Another dilemma is loyalty versus truth, as Mr. Bloom, Brian, and other employees do not disclose the unethical activities that were going on to the public. These dilemmas present the lack of integrity and transparency in the management and operation of Enron that was subtly portrayed.
Opinions Relating to the Movie
My perception resonates with the need to encourage employees to whistleblow when they detect unethical events. They are responsible for monitoring and uncovering such activities influencing ethical behavior for sustainable practice. Therefore, companies can encourage managers and employees to act ethically through company policies and values that enhance ethical cultures (Jannat et al., 2021). Human resource strengthening facilitates a suitable environment for open communication, teamwork, and belonging, instilling a sense of responsibility and promoting company values to employees and managers (Stone et al., 2020). Thus, organizations should integrate modifications to their structures to support ethical transformation.
References
Jannat, T., Alam, S. S., Ho, Y. H., Omar, N. A., & Lin, C. Y. (2021). Can corporate ethics programs reduce unethical behavior? Threat appraisal or coping Appraisal.Journal of Business Ethics, 176(1), 37–53. Web.
Mercado, N. (2011). The crooked E – The unshredded truth about Enron (2003)[Video]. YouTube. Web.
Saputra, K. A. K., Subroto, B., Rahmanc, A. F., & Saraswati, E. (2020). Issues of morality and whistleblowing in short prevention accounting. International Journal of Innovation, Creativity, and Change, 12(3), 77–88. Web.
Stone, R. J., Cox, A., & Gavin, M. (2020). Human Resource Management (10th ed.). Wiley. Web.